Apple earnings preview: Focus on the iPhone 5

It's that time again: On Wednesday (US time), Apple will regale us with stories of the products it has sold in the past quarter, and the money it has added to its overflowing bank account. Financial analysts will pepper CEO Tim Cook and CFO Peter Oppenheimer with questions, which--if previous calls are any indication--the duo will deftly dodge.

As usual, Macworld will be on hand with live coverage of the conference call, beginning at 2pm US Pacific/5pm US Eastern time.

You need to limber up first with a few mental deep-knee bends. So we've prepared a handy primer of the topics that will likely surface during the hourlong conference call, to get you prepared so that you, too, can play along at home.

iPhone 5 sales of the century

No surprise here. After the ungodly uproar over Wall Street Journal and Nikkei reports about "weak" iPhone 5 demand, the market's going to be looking for any excuse to badger Apple about sales of its latest smartphone. There's definitely a perception on Wall Street that Apple lives or dies by iPhone sales these days, even if the truth is more complicated.

So what do we know? Well, Apple has already told us that it sold 5 million of the handsets during the device's launch weekend, and dealt out another 2 million when the iPhone 5 went on sale in China a few months later. The analysts will no doubt have already run the numbers on last quarter's almost 27 million iPhone sales, to try to figure out what percentage of those can be laid at the feet of the iPhone 5.

Apple doesn't habitually break out sales of its individual product lines, though, so expect a large amount of scrutiny on the total iPhone sales for the quarter. For comparison's sake, the company sold 37.04 million iPhones in last year's first quarter; expect analysts to scream their heads off if Apple doesn't top that number.

And you can expect plenty of questions on Apple's supply/demand balance for iPhones, and what the company expects to sell in the following quarter. (Hint: Apple never forecasts specific numbers on its product lines, so don't expect any "additional color" on that.)

Finally, what would Apple's quarterly conference call be without analysts' attempts to squeeze details from Cook and Oppenheimer about future products? The rumored low-cost iPhone is the most likely target here--expect inquiries about "Apple going after the low-end of its market." And expect Tim Cook to completely stonewall them--he's the kind of guy who can win a staring contest over the telephone.

Mini iPad, maxi profits?

Apple's other new iOS device will probably be eclipsed by the iPhone sales questions, but don't think it will entirely escape attention. This is the first full quarter of the iPad mini's availability, and though we know that the Wi-Fi-only models of it and the fourth-generation iPad picked up 3 million sales in their first three days, and contributed to the 14 million iPad sales from last quarter, there are still likely to be some questions over the sales performance of Apple's tablets.

In particular, it seems likely that analysts will want to get an idea of whether the lower-price iPad mini is taking away sales from its fourth-generation big sibling. Of course, Apple's hardly a company to sacrifice profit margin in order to produce a low-cost product, so there's little question that it's still making bank on the mini--the question is whether it's at the expense of iPad profits.

We might also see some questions from analysts about how often to expect refreshes of Apple's tablet going forward. Last fall's fourth-generation iPad came only about half a year after the third-generation model; analysts will want to try to suss out whether that was an aberration or the new world order.

In the year-ago quarter, Apple moved a then-record 15.4 million iPads. Having already passed that number in last year's third quarter, Apple will likely top it for this past holiday quarter as well, especially with the low-cost mini in the mix.

Mac the knife

The Mac line got a bit of love last year, with a massive revamp to the iMac line and improvements to the Mac mini. While the analysts don't seem to salivate over Apple's computers as much as they do over its mobile devices, you can still expect Apple to tout the sales of its desktops and laptops, especially in comparison to the growth (or lack thereof) in the rest of the PC market.

If there's anything else to be wrung from the Mac lineup, it might be a hint about the promised "something really great" for pro users that Tim Cook spoke of last June. Then again, Apple doesn't generally use its financial calls to talk about its roadmap, and it's probably not a product with widespread consumer appeal.

And, just to put numbers in context, Apple moved a not-too-shabby 4.9 million Macs last quarter, which compared pretty favorably with the 5.2 million it sold in the first quarter of 2012. Bolstered by the refreshes of the desktop line and the new Retina MacBook Pros, expect strong sales from the holiday quarter. And, as ever, you can probably bet that Oppenheimer will point out that 50 percent of customers who bought Macs from the Apple Store were new to the Mac.

Money in the bank

Apple ended its fiscal year 2012 with $121.3 billion in the bank, which would probably allow it to buy more than a few private islands around the world. Cook & Co.'s investment strategy seems to suggest that the company's reserves will only continue to increase this quarter.

As far as raw numbers go, Oppenheimer last quarter forecast that the company would bring in $52 billion in revenue with earnings per share of $11.75. As of this writing, analysts' consensus has those numbers pegged at $54.69 billion and $13.42 respectively. Apple's guidance is famously conservative--the company estimates numbers that it's confident of hitting--but Wall Street will also work itself into a tizzy if the company doesn't meet the magical numbers that analysts have predicted.

Keep in mind that last year the company brought in $46.33 billion in revenue with earnings of $13.87 in its first fiscal quarter--that's higher earnings, but lower revenue than what it's anticipating this time. Looking forward in October, Oppenheimer attributed the drop in the earnings forecast to a number of factors, from the arcane--currency fluctuations--to the simple: The first quarter of 2012 had one more week than the first quarter of 2013.

Well, rumors continue to swirl about Apple making a television set. While we don't expect to hear anything substantive about the hypothetical product itself, an update on the current Apple TV--which Cook last May described as "an area of intense interest"--would be welcome. The Apple CEO might also give a few notes on the iTunes Store and App Store businesses, the latter of which topped 40 billion downloads earlier this month, with no sign of slowing down.

Whatever the case, the fine details that do or don't get discussed are sure to provide plenty of fodder for analysts and pundits alike. And that, in turn, ought to keep us all occupied for the next three months, at least.

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

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